Get Credit for Making Your Home Energy-Efficient IRS Tax Tip 2013-48, April 4, 2013 If you made your home more energy efficient last year, you may qualify for a tax credit on your 2012 federal income tax return. Here is some basic information about home energy credits that you should know. Non-Business Energy Property Credit You may claim a credit of 10 percent of the cost of certain energy saving property that you added to your main home. This includes the cost of qualified insulation, windows, doors and roofs. In some cases, you may be able to claim the actual cost of certain qualified energy-efficient property. Each type of property has a different dollar limit. Examples include the cost of qualified water heaters and qualified heating and air conditioning systems. This credit has a maximum lifetime limit of $500. You may only use $200 of this limit for windows. Your main home must be located in the U.S. to qualify for the credit. Not all energy-efficient improvements qualify, so be sure you have the manufacturer’s credit certification statement.

It is usually available on the manufacturer’s website or with the product’s packaging. The credit was to expire at the end of 2011. A recent law extended it for two years through the end of 2013. Residential Energy Efficient Property Credit This tax credit is 30 percent of the cost of alternative energy equipment that you installed on or in your home. Qualified equipment includes solar hot water heaters, solar electric equipment and wind turbines. There is no limit on the amount of credit available for most types of property. If your credit is more than the tax you owe, you can carry forward the unused portion of this credit to next year’s tax return. You must install qualifying equipment in connection with your home located in the United States. It does not have to be your main home. The credit is available through 2016. Use Form 5695, Residential Energy Credits, to claim these credits. You can get Form 5695 at IRS.gov or order it by calling 1-800-TAX-FORM (800-829-3676).

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Read through, and make sure to consult your professional tax planner to determine what will work for your specific circumstances. 1. According to the IRS, home improvements are jobs like plumbing, wiring, installing air conditioning or putting on a new roof, that add value and prolong our house's life. You can't necessarily deduct these costs, but you can add the price of materials and labor to the basis of your home. In certain circumstances, this will reduce the tax owed on the sale of your home in the future, if you decide to sell it. Head to the IRS webpage for homeowners to find out more information. 2. There are some home products, particularly appliances that are Energy Star rated, that may qualify for a deduction. You can get the full list here. 3. You CAN deduct real estate taxes, interest that qualifies as home mortgage interest, and mortgage insurance premiums. Visit the IRS site for the specifics. 4. If you own a condo or co-op, you can enjoy tax deductions similar to those of detached homes.

This is great to know if you're looking into homeownership for 2013, but hate to mow the yard or drag the garbage to the curb. 5. If you're a renter, you won't be able to deduct these costs from federal taxes, but in certain states including Maryland, Minnesota and California, you may be able to receive a credit on your state tax return. Each state has different rules, so check with your tax planner for details. 6. If you move more than 50 miles to a new full-time job in the same line of work, some of those moving expenses are deductible. For more information, see the IRS publication on moving expenses. These breaks may be available to both homeowners and renters. 7. If you work out of your home or apartment you may be able to deduct a portion of the mortgage or rent for this use, if you meet specific requirements. This could be a tricky one though, so as with all tax tips, always seek professional advice to make sure you qualify. Read here for the specifics. 8. You can deduct contributions made to a qualified organization, assuming you are filing using Form 1040.